Free advice

[SGlenn]

Hi

I am new to this forum and have been reading various posts. I have been trading from home now for over 3 years and have made plenty of mistakes especially in the early days. However for what it's worth here are a few tit bits of what I believe to be sound advice...

1. When choosing a broker focus on a low spread not on the margin requirements.
2. When dealing never risk any more than 3 % of your total equity on any one trade. i.e. Set an appropriate stop loss - always
3. Unless you have a good feeling or some wonderful 'inside' information keep out of the market when major economic news is about to come out.
4. Work hard at learning technical analysis. Use SMA and Fib Retracements in trending markets and a 7 point RSI in sideways markets.
5. Remember there is no such thing as easy money - sure you can be lucky - but you can do that at the races as well. If you want to consistently make a few quid then study high and lows of just a few currencies max 3.
6. Know the support and resistance levels.
7. Have fun!

Cheers

SGlenn

 

[wisestguy]

>1. When choosing a broker focus on a low spread not on the margin requirements.


I dissagree . low margins are good , keeps your liquidity high , gives you more bites at the apple - very important when you gun for the big swings .low spreads are desirable but a couple of piddly points here and there ain't gonna phase a guy like me .


>2. When dealing never risk any more than 3 % of your total equity on any one trade. i.e. Set an >appropriate stop loss - always


yes , and I add make a REAL SL , phone / key it in , not some self delusive mental stop.


>3. Unless you have a good feeling or some wonderful 'inside' information keep out of the market when >major economic news is about to come out.


yes to an extent , but sometimes very useful to trade off the reaction to the news.


>4. Work hard at learning technical analysis. Use SMA and Fib Retracements in trending markets and a 7 >point RSI in sideways markets.


there are others better than the above , but essentially stick to a few indicators , rather than a whole lot.


>5. Remember there is no such thing as easy money - sure you can be lucky - but you can do that at the >races as well. If you want to consistently make a few quid then study high and lows of just a few >currencies max 3.


I would go for 2 , but 3 would be Ok I guess.


>6. Know the support and resistance levels.

yes.


>7. Have fun!

until you get bored !

 

[SGlenn]

Clarification

Added some comments below

>1. When choosing a broker focus on a low spread not on the margin requirements.


I dissagree . low margins are good , keeps your liquidity high , gives you more bites at the apple - very important when you gun for the big swings .low spreads are desirable but a couple of piddly points here and there ain't gonna phase a guy like me .

Agree - to clarify I have seen people actually chosing a broker because of the available gearing and ignoring a 5 pip spread. My views on risk are as per point 2 below. Offering high gearing is a tactic to get the punter money just a little bit quicker. Whereas a 2 pip spread and common sense does give you a chance.


>2. When dealing never risk any more than 3 % of your total equity on any one trade. i.e. Set an >appropriate stop loss - always


yes , and I add make a REAL SL , phone / key it in , not some self delusive mental stop.

Yes always a real one !

>3. Unless you have a good feeling or some wonderful 'inside' information keep out of the market when >major economic news is about to come out.


yes to an extent , but sometimes very useful to trade off the reaction to the news.

Agreed - but having many a stop loss can be hit only for the market to reverse seconds later simply losing you money.

>4. Work hard at learning technical analysis. Use SMA and Fib Retracements in trending markets and a 7 >point RSI in sideways markets.

I am interested to know what you use. THese ahve done very well for me but I am not perfect

there are others better than the above , but essentially stick to a few indicators , rather than a whole lot.


>5. Remember there is no such thing as easy money - sure you can be lucky - but you can do that at the >races as well. If you want to consistently make a few quid then study high and lows of just a few >currencies max 3.


I would go for 2 , but 3 would be Ok I guess.


>6. Know the support and resistance levels.

yes.


>7. Have fun!

until you get bored !

 

[neil]

S Glenn.............Good post. Nice to hear from someone who actually trades. We all have different ways of trading so I would not take issue with any of your points since all of them would help to keep the uninitiated out of trouble. Thanks for posting and I am sure the many novices here would also thankyou for sharing your thoughts.

 

[wisestguy]

Sglenn ,

I would add that my use of indicators are for indecies mainly , so they may perform differently on forex.

and re : the 5 point spread vs. 2 . I would definitely consider that a good thing .